Stimulus talks continue

House GOP to delay bringing bill to floor

WilliamL. Watts

WASHINGTON (CBS.MW) -- With time running out for a deal on an economic stimulus package, the White House and congressional leaders on Tuesday tried to keep hopes alive for a compromise.

White House spokesman Ari Fleischer said President Bush was encouraged by a weekly White House breakfast meeting with top congressional leaders and said the administration would continue efforts to reach a final deal.

"Action has to follow from this, but the president was pleased with the tenor of the conversation and the president is going to continue to talk directly with the leaders," Fleischer said.

Senate Majority Leader Tom Daschle, D-S.D., said the meeting, which also included House Speaker Dennis Hastert, R-Ill.; Senate Minority Leader Trent Lott, R-Miss.; and House Minority Leader Richard Gephardt, D-Mo.; featured a "very good" discussion about stimulus, with everyone agreeing that talks would continue.

"I thought the president, Speaker Hastert, Sen. Lott all acknowledged at least a desire to keep talking and try to find a way around this impasse," he said.

Lott said negotiations were "still alive" but put odds for a deal at no better than 50-50.

"Yes, I think it is still alive," Lott said. "The opportunity is still there because we do need to provide opportunity for our people to get to work."

There was also plenty of finger pointing, as Democrats and Republicans attempted to pin the blame on each other should the talks fail. Time is running out for a deal, with lawmakers eager to wrap up the year's legislative business by the end of the week.

The House in October passed a $100 billion economic stimulus weighted toward reductions in corporate and personal income taxes. Senate Democrats objected to the bill and drafted a different bill weighted more heavily toward security-related spending after the Sept. 11 terrorist attacks and toward more far-reaching health and unemployment benefits. House-Senate talks began earlier this month.

COBRA battle

A debate over expanded health benefits remains one of the biggest stumbling blocks.

Democrats are seeking federal aid that would help unemployed workers buy health insurance under COBRA, a law that allows people who lose or leave their jobs to continue to pay for employer-provided insurance. They also want to take steps that would expand Medicaid eligibility for unemployed workers not eligible for COBRA.

Republicans have offered a 50 percent tax credit that unemployed workers could use to buy health insurance. The credit would also cover workers whose former employers didn't provide health insurance.

Democrats contend the GOP proposal would leave many workers at risk of sky-high premiums or rejection for pre-existing conditions.

Republicans argue that the Democratic plan would provide aid to people who voluntarily quit their jobs or chose to retire.

Republicans are also seeking a cut in the 27 percent personal income tax rate cut to 25 percent in 2002, a reduction that is currently scheduled to take effect in 2006.

Democrats have offered to accept a cut in the rate to 26 percent in exchange for GOP acceptance of their health-care demands. Democrats are also resisting Republican calls to repeal the corporate alternative minimum tax.

GOP bill delayed

House Republicans, meanwhile, delayed a threat to bring a compromise stimulus package of their own to the House floor, saying they wanted to give negotiators every last chance to strike a deal.

The House, however, would likely have to take some kind of action by Wednesday evening at the latest given plans by both the House and Senate to adjourn for the year at the end of the week, the Texas Republican said.

Last week, Armey had threatened to bring a new economic stimulus bill to the floor Tuesday night if no agreement was reached. The bill would be "very generous" toward Democratic priorities in an effort to attract the support of enough Senate Democrats to gain passage in the upper chamber, he said.

Democrats hold a 50-49 majority in the Senate.

Daschle, noting special budget-related rules in the Senate that effectively require 60 votes to overcome procedural obstacles, said such efforts won't work.

"I hear reports that the Republicans in the House may actually offer another stimulus package and send it over here and jam us," Daschle told reporters after a weekly meeting of Senate Democrats. "Well, that isn't going to work. You need 60 votes to get something done here, and there aren't 60 votes for ... any of these Republican proposals."

The only way to complete a stimulus package is through the House-Senate negotiations, he said.

The White House and GOP leaders have accused Daschle of holding up stimulus legislation that could pass the upper house in order to appease the liberal wing of the Democratic Party.

"I believe Mr. Daschle, for some reason, is the cork in the bottle," Armey said.

Fleischer said the White House would continue to reach out to Senate centrists as part of an effort to build support for a compromise plan in the chamber.

Common ground

There are some areas of agreement.

Negotiators have largely agreed to a 13-week extension of unemployment benefits and rebates of up to $300 for low-income working Americans who didn't qualify for income tax rebates earlier this year.

They've also agreed to allow businesses to take a 30 percent depreciation bonus for purchases of capital items and will let companies use current losses to cut tax bills from the past five years.

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